The European Commission is sounding out the potential of the blockchain technology in order to fight against infringements on intellectual property in supply chains.

The blockchain technology, e.g. through the application of smart contracts, gives better insights into supply chains. By monitoring supply chains via blockchain, every physical product can be clearly identified, its origin, transportation and deliveries can be exactly tracked. In the future, such transparent supply chains will be a huge support in fighting child labor, modern slavery, or product piracy and counterfeiting. The blockchain technology has already been called into action in today’s global markets: for example, by Walmart for the real time monitoring of its supply chains in China, or by some e-commerce platforms in their war on piracy.

In the area of intellectual property, the blockchain technology unfolds its potential first of all in IP registration and licensing through smart contracts. In the course of IP registration, the application of blockchain can disclose authors or inventors, owners, or users of the IP rights. Each transaction with a work registered through blockchain is evident and unchangeable, since blockchain cannot be corrupted or manipulated. Thus, forgery-proof evidence of intellectual authorship exists. Theoretically, everyone can also see the complete track of transactions including all previous owners, licenses, sub-licenses or transfers. Binded and Ascribe are examples of websites that use the blockchain technology this way, and thus, enable the authors to grant licenses and track the use of their works in the internet.

Blockchain is also used for securing the novelty of IP-related inventions. Novelty is a crucial factor when applying for a patent. If an invention is not novel, the patent cannot be registered. Since a record via blockchain cannot be manipulated, such publication ensures much more security and transparency than the traditional way of publishing inventions in scientific journals. A patent registration by a third party is then impossible, the original author or inventor can be evidently proven. In this way, IP protection is decentralized and less bureaucratic.

It is to be expected that governments and international IP organizations will explore various ways of application of this technology. For example, in 2015 China has already included it in its Thirteenth Five-Year National Informatization Plan – the blockchain technology is intended to be used for taxation and electronic invoicing.